Array Finance Price Calculation Error

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Array Finance

Array Finance is an online investment platform, which included a large number of funds in a smart contract hot wallet.

A vulnerability in that smart contract most likely allowed one of the team members to make off with the funds. The team has not provided any further information after their update on July 20th.

This is a global/international case not involving a specific country.

About Array Finance

"Invest in trusted and user-curated portfolios. Quit protocol hopping and start earning. Create and easily invest in trusted portfolios, earning real returns." "Made for the decentralized community, built by a public team with experience at Consensys and Fortune 500 companies." "The Array protocol has been crafted to solve the fundamental issues within the DeFi space. Developed and tested by industry veterans, the ArrayDAO bonds and backs tokens, locking real value as collateral behind each Array token, minimizing volatility."

"Algorithmically diversify based on personal risk tolerance. Quit being limited by a handful of strategies- our tools allow you to build and deploy yourself, earning performance fees in the process." "By aligning incentives between users, traders and liquidity providers, the ArrayDAO keeps DeFi collaborative by distributing rewards where they matter most. With Array, passive DeFi is possible. No longer will you need to chase APY and wipe out your profits with transaction fees."

"Array is the first ever passive DeFi protocol, aimed at long term, consistent growth. Array is token and protocol agnostic, which allows it to constantly be modified to grab safe yield, diversifying your DeFi. One click enters an Array portfolio, exposing you to dozens of yield farms and assets, which rebalance automatically."

"Around 4:30am CST [on July 19th], Array was hit with a flash loan attack." "Array Finance was attacked by lightning loans. The attacker used Array Finance's pricing mechanism to rely on aBPT's totalSupply to attack Array Finance and made a profit of 186.62 ETH." "The attacker used Array Finance's pricing mechanism to rely on aBPT's totalSupply to attack Array Finance. Officials stated that the attacker made a profit of about 272.94 ETH, worth about $515,000."

"The attacker borrowed a flash loan from AAVE and invoke the “buy” function of array to mint 430 ARRAY. They then invoked our “joinpool” function 5 times to earn 726.38 aBPT. They then burned the 430 ARRAY to receive 77.17 aBPT. When the attacker exited the pool, they burned 804.55 aBPT tokens and received 748,271.55 DAI + 751,225.08 USDC + 997.62 WETH + 22.63 WBTC + 22.74 renBTC effectively draining our balancer pool. After all of this, the attacker received around 272.94 ETH or about ~$515k in stolen money."

"First, the attacker invoked the buy function of the Array Finance. The attacker gained 430 ARRAY tokens minted by the Array Finance using 45.91 WETH. Then the attacker invoked the joinPool function of a closed source contract (Array Collater - 0xa800cda5) five times. He/she deposited 676,410.58 DAI + 679,080.46 USDC + 901.82 WETH + 20 WBTC + 20 renBTC and gained 726.38 aBPT tokens minted by Array Collater. The attacker invoked the sell function to burn 430 ARRAY tokens and got 77.17 aBPT tokens. At last, the attacker invoked the exitPool function of the Array Collater. He/she burned 804.55 aBPT tokens obtained in previous two steps and obtained 748,271.55 DAI + 751,225.08 USDC + 997.62 WETH + 22.63 WBTC + 22.74 renBTC."

"I want to apologize on behalf of the team that we let this happen. I believe most of the team is in agreement that we’d like to try and find a company or organization to collateralize our liquidity that was lost and pay them back post launch. However, we want the CCO contributors to vote on how to proceed."

"Moving forward, the rest of the team has agreed to putting Gavin in charge. We’re also removing Gismar from our team as we believe his negligence + carelessness lead to the liquidity being stolen or that he himself stole the money. We are not sure which one it was or if it was both." "We are actively trying to contact and reach Gismar but all of his social media has been turned off and scrubbed. We genuinely are almost the finish line and happy to answer any questions." "Should anyone have contact information as it relates to Gismar, please send it to me."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Array Finance Price Calculation Error

Date	Event	Description
July 19th, 2021	Main Event	Expand this into a brief description of what happened and the impact. If multiple lines are necessary, add them here.

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $515,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

There do not appear to have been any funds recovered in this case.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

General Prevention Policies

Funds stored in smart contract hot wallets can generally not be considered secure. Funds should be secured by requiring multiple signatures on withdrawals and key contract functions.

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.